Interim order on tax liability: "future period" limited to post-order liability, quashing additional interest demand.

The phrase "future period" in the interim order was construed to cover only liability arising after 18 January 2012, not assessments for earlier years merely because the assessment order was passed later. The court held that tax demand relating to a prior assessment year remained within the accrued tax liability regime, where the required arrangement was 50% cash deposit and the balance secured by bank guarantee. As the petitioners had already complied with that requirement for the relevant year, the later demand for additional interest was based on an incorrect reading of the Supreme Court's order and was unsustainable. The impugned demand was quashed.

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Issues: Whether, on a construction of the Supreme Court's interim order, the petitioners were liable to pay the impugned demand towards interest for an assessment year preceding the order date, or whether such demand was covered by the requirement to deposit only 50% of accrued tax liability and the balance by bank guarantee.

Analysis: The expression "future period" in the interim order was construed to mean liability arising or accruing after 18 January 2012. The Court held that even where an assessment order was passed after that date, if it related to a prior assessment year, the demand would still fall within the category of accrued tax liability or arrears, to which the 50% cash deposit and balance bank guarantee arrangement applied. On the facts, the petitioners had already complied with that requirement for the assessment year in question, and the subsequent demand for further interest was held to rest on a interpretation of the Supreme Court's order. The demand notice was therefore unsustainable.

Conclusion: The impugned demand for additional interest was not enforceable against the petitioners and was quashed.

Ratio Decidendi: The phrase "future period" in an interim order concerning tax liability refers only to liability arising after the date of that order, and not to assessments for earlier periods merely because the assessment order is passed later.

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